Philly Fed Manufacturing Survey declines to 5.0 in March

Manufacturing activity in the region increased at a modest pace in March, according to firms responding to this month’s Manufacturing Business Outlook Survey. The survey’s current indicators for general activity and new orders were positive and remained near their low readings in February.… The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, at 5.0, was virtually unchanged from its reading of 5.2 in February …

Although the current employment index, at just 3.5, was virtually unchanged from last month, the index remains well below its average reading of about 14 over the second half of last year. …emphasis added

This was below the consensus forecast of a reading of 7.0 for March.

Click on graph for larger image.

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index. The light blue line is an average of the NY Fed (Empire State) and Philly Fed surveys through March. The ISM and total Fed surveys are through February. Note: Areas with oil production (Texas and some in Kansas City region), have been especially weak.

The average of the Empire State and Philly Fed surveys declined in March, and this suggests a slightly weaker ISM report for March. Calculated Risk